China Construction Bank head: Property tax necessary

16:25, October 11, 2010      

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It is necessary for China to levy a property tax, which will reduce dependence on the industrial sector for national fiscal revenues, said Guo Shuqing, chairman of China Construction Bank, in a recent interview with People's Daily.

He also said that the tax rate is disproportionately low compared to sky-high housing prices, so the property tax may not be able to produce desirable effects in curbing the existing runaway prices.

China's construction industry has provided some 50 million people with jobs and promoted the development of more than 50 related industries, Guo said.

"There is no doubt that the real estate industry, which contains the construction industry in a broad sense, was, is and will be China's mainstay industry for a very long time," Guo said. "The housing issue is not only an economic problem, but also an issue of people's livelihoods, so China should continue to improve the regulation of its real estate market."

At present, the overall housing price level is greatly influenced by the unbalanced housing markets in different regions. Guo noted that a few big cities, including Beijing, Shanghai, Guangzhou and Shenzhen, have played a leading role in lifting housing prices nationwide to unreasonable levels.

China's second and third-tier cities lag far behind first-tier cities in employment conditions because of regional economic imbalance and excessive concentration of large companies and institutions as well as public educational, cultural and medical resources in a few large coastal cities,

"Therefore, in addition to macro-control policies, governments at all levels should take effective measures to improve the supply and demand structure of the real estate market," Guo said.

For example, governments can decentralize public services moderately through regional planning and related policies, encourage companies to expand business to central and western regions and accelerate the construction of affordable houses, he said. Governments can also provide preferential policies for the development of home rental markets and guide people to take correct housing consumption attitudes, Guo said.

By People's Daily Online


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